Guide to Expat Tax Return Filing Requirements

When it comes to tax for expats, there needs to be some clarification on the filing times, places, and expectations. Since expat taxes are more complicated, the IRS has different rules for those filing a foreign income or living abroad. Here is a brief guide to the major aspects of filing your expat taxes and the requirements and deadlines expected by the IRS. It can help you remain compliant and paying the right amount without spending too much on the taxes you owe to the IRS.

1. When Should I File My Taxes?

When you are working overseas or gaining income from foreign sources, you actually have a little more time. Tax for expats generally takes a little more time to figure out so the IRS has permanently expended the tax deadline by two months. Bear in mind that this could change depending on tax bills and procedures enacted over the fiscal year, but as it stands, you can file your foreign taxes before June 15 instead of April 15. This also means any fines or penalties for filing late are also adjusted to June 15.

If this still is not enough time, the IRS suggests that you file “Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.” If this application is approved, then you will actually be able to extend your deadline until October 15 of that year. The IRS does warn, however, that “even if you are allowed extensions to June 15 and/or October 15, you will owe interest on any unpaid tax amount from the original due date of the return.”

2. Where Do I Send My Taxes?

If you are using a certified, qualified, and experienced tax for expats accounting firm, then they will generally be able to file your taxes for you and send them to the proper place. However, if you are doing it yourself or need to mail additional material to the IRS, then there are two main addresses that can each be found here.

3. Where Do I Find My Tax Identification Number?

If you are filing taxes in the United States, especially if you are filing tax for expats, you will need either a Social Security Number or an Individual Taxpayer Identification Number. These numbers are crucial for ensuring they know who you are and who is giving them money. Without these numbers, your tax filing is pointless.

The good news is that you can easily acquire one of these numbers for your tax for expats filing. If you do not have a Social Security Number, simply contact their office and they will walk you through the process and let you know if you are eligible. If you are not eligible, then you will need to acquire an Individual Taxpayer Identification Number. This number can be acquired by filing a W-7 form along with appropriate documentation that proves who you are.

4. How Do I Calculate Exchange Rates?

Since exchange rates change every second, it can be difficult to know exactly how much tax you actually owe. Thankfully, the IRS has made this aspect fairly easy, although it always helps to contact a professional tax for expats accounting firm to help you figure out the right and best rate for filing your taxes.

According to the IRS, “Taxpayers generally use the yearly average exchange rate to report foreign-earned income that was received regularly throughout the year. However, if you had foreign transactions on specific days, you may also use the exchange rates for those days.” They even have a page on their site that outlines all of the exchange rates just to make things even easier.

Tax for expats is confusing and complicated, which is why the IRS has put in a number of programs and stipulations that can make the process easier and give you more time to figure out what you owe. That said, these taxes can still be complicated, especially when you factor in foreign income tax, dependents who are not US citizens, and income not derived explicitly from hourly or salaried labor. This is why many expats turn to professional, experienced accounting firms that specialize in tax for expats. They can help you file your taxes correctly while ensuring that you only pay what is owed.